Microsoft’s XP intransigence is simply mystifying; can Dell save the day?

You have to wonder what’s going on a Microsoft when it comes to the issue of keeping XP available past the planned June 30 cutoff date.

The company clearly knows that Vista was hardly its best moment, an ungainly OS forced out the door after years of delay so Microsoft would have something new to sell. A triumph of short-term thinking that is turning out to be a Pyrrhic victory. But Dell may offer the face-saving out for Microsoft that also saves XP.

Decidedly mixed signals, so why the line in the sand for XP?

While both chairman Bill Gates and CEO Steve Ballmer tout Vista as great, both have also given signals they don’t really believe that.

In January, Gates soberly noted that there were lessons to be learned from Vista’s development and slow uptake.

A week ago, Ballmer described Vista as a “work in progress” — not exactly a compliment from something that was in development for five years and has been on the market for more than a year.

And the industry has been rife for months with reports that pretty much all the key decision-makers on Vista are no longer at Microsoft, suggesting a quiet purge.

Today, Ballmer hinted that Microsoft may extend XP’s end-of-sales date — at least that’s how the Associated Press and the U.K.’s Register newspaper interpreted his remarks. Microsoft quickly reconfirmed the June 30 end-of-sales date, saying that Microsoft’s belief is that customers like and want Vista. That doesn’t mesh what InfoWorld has heard from readers, of which more than 170,000 have signed a petition asking Microsoft not to stop selling XP.

“I’d love to know exactly what, and how many ‘customers’ Microsoft claims to be getting this feedback from,” David Bookbinder, owner of a Boston-area PC support company, told the IDG News Service. “My guess, and it’s an educated one, is that it’s more likely stockholder feedback.” In other words, Microsoft should ignore its customers’ desires and instead sell them a more profitable product and ensure they have no alternative to it.

Let’s hope that’s not what’s going on. I’d rather believe that Microsoft has drunk its own Kool-Aid and is honest in believing Vista is great, rather than is sacrificing its reputation and brand loyalty for a short-term pickup. (The Christian Science Monitor has a compelling take on what Microsoft may be thinking.) And if that’s the strategy, it’s Apple that has been getting the pickup, ironically enough. Probably not Microsoft’s intent.

Maybe it’s Dell that will resolve this mess

InfoWorld’s Ephraim Schwartz, following up on a reader tip, confirmed today that Dell will continue to sell XP-based PCs after the June 30 cutoff, using an option in some of Microsoft’s Vista licenses.

If Dell sticks to these guns — and if Hewlett-Packard joins in — then XP can be saved. And Microsoft need not claim defeat. Microsoft’s “downgrade” option for Vista Business and Vista Ultimate let users and PC makers install XP over Vista using the same license. (If you use any other version of Vista, you can’t “downgrade,” so avoid the other Vista versions after June 30.)

That option is not new, but until Dell’s new program, the PC makers weren’t using it.

Dell clearly has gotten the message that there is a longer term market for XP. Dell oscillates between No. 1 and No. 2 in terms of overall PC sales, so its decision to keep XP available beyond Microsoft’s cutoff date should tell Microsoft something. Dell is clearly listening to its customers, even if Microsoft is unable to.

The beauty of Dell’s approach is that it uses Microsoft’s own “downgrade” option, so Microsoft doesn’t have to change any of its stated policies. It even lets Microsoft claim a Vista sale — you can only get XP after June 30 if you buy one of those Vistas. And, if Microsoft is concerned about the bottom line, it encourages the sales of the pricier Vista versions — maybe what Microsoft intended all along.

I cringed when writing that last comment. It’s almost X-Files-like in its convoluted conspiracy thinking, but given the reality distortion bubble Microsoft seems to be in, who knows any more?

Regardless, Dell is showing Microsoft the way to promote Vista while keeping XP an ongoing concern. If HP, Toshiba, Gateway and others showed the same brass as Dell, this issue would evaporate overnight. Let’s hope they do.